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Scripps Networks to Expand Foothold

Zacks Equity Research

Scripps Networks Interactive Inc. (SNI), a pure-play lifestyle cable network company, is expanding its Internet and mobile applications that will allow Time warner Cable Inc.’s (TWC) subscribers to watch Scripps’ content on a wide array of devices.

Scripps is rolling out its popular lifestyle cable channels including Food Network, HGTV, Travel Channel, DIY Networks and Cooking Channel on Time Warner Cable’s TV Everywhere platform.

Meanwhile, Time Warner Cable subscribers can watch their favorite shows on these networks from anywhere in the U.S. and on any platform. They simply have to verify their subscription by logging onto the Scripps Networks websites by using their Time Warner Cable IDs.

Scripps Networks states that there has been a growing demand among viewers to access content via different platforms. The tie-up will allow subscribers to view Scripps’ content while on the move. On the contrary, TV Everywhere will have access to increased content, vending off competition from other online streaming companies like Hulu, Netflix Inc. (NFLX) and You Tube.

Scripps Networks reported healthy financial report for the first quarter of 2013 where the top line and the bottom line topped the Zacks Consensus Estimate. However, declining viewership remains a major concern for Scripps Networks, which has resulted in reduced advertising revenues.

Scripps Networks competes for advertising revenues with other media alternatives including several broadcast networks, the Internet, newspapers, radio stations and billboards. We believe that the availability of Scripps’ content via TV Everywhere platform will increase its viewership, which in turn will boost advertising revenues.

SNI currently carries a Zacks Rank #3 (Hold). Among the other companies in the industry, Entravision Communications Corp. (EVC) with a Zacks

Rank #2 (Buy) is a better option for the investors.

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